Distribution Escrow Solution
Distribution Escrow Solution for protection against supplier failure
If the software supplier no longer meets its obligations, it has its effect on the product that the distributor delivers to its customers. The distributor will continue to serve its customers and prevents that he cannot deliver.
The distributor is dependent on the software of the software supplier too. This dependence can be minimized with the Distribution Escrow Solution. In the event of failure of the supplier, the distributor can acquire, as escrow holder, the right to maintain, support and continue the development of the materials from the deposit. This allows the distributor to continue the support of its customer and obligations of the license agreement.
The Distribution Escrow Solution for the benefit of end users
A distributor sees the software end users as its customers. These users want continuity of their businesses and business processes supported by the software and protect themselves against the loss of such processes through the use of escrow arrangements. For the end user is not relevant whether the application is delivered through a distributor or directly from the software vendor. The Distributors Escrow Agreement solves this issue by involving the supplier in the chain.
The distributor can offer its customers the assurance that the business risk are avoided by using the Distribution Escrow Solution. The necessary permissions from the software maker (owner of the IP of the software product) for the arrangement is acquired through an authorization which is attached to the Escrow Solution. This arrangement is common for the software owner as he has the option to define the obligations of the distributor to take over.
The roles of all parties are clearly and unambiguously defined in a specific purposely drawn agreement.
The reality shows a combination of two widely used systems. The distributor plays in the Escrow Distribution Solution logically a dual role. As the distributor he wants his own continuity secured by his supplier, as well as the security of escrow to his customers.
Using a Distribution Escrow Solution, all parties involved: software owner, distributor to end user are protected against possible failure of one of the parties and this gives assurance for the entire value chain.